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Actionable news in NOV: NATIONAL OILWELL VARCO Inc,

National Oilwell - The Road To $15

Summary

Over the past year, NOV's revenue has been cut in half. Its EBITDA is practically non-existent.

NOV is up 6% over the past year, illustrating the frothiness of the stock market.

Based on a bottom-up analysis, NOV is worth $15 - over 50% below its current value.

Avoid NOV.

National Oilwell Varco (NYSE:NOV) is a high quality name in the oil services space. Its portfolio of businesses - from offshore, to land drilling to after-market sales - is envious. However, the downturn in the oil industry has taken a toll on the company. Its clients have been hurting; they have shared that pain by delaying or canceling equipment orders. The company's revenue, earnings and backlog have spiraled lower in the process.

The question is, "How do you value NOV?" Are we at an inflection point in the market or can E&P go lower? I believe the slow down in the global economy will keep oil prices sub-$50 which does not bode well for E&P or for National Oilwell's earnings. Q2 revenue fell 21% Q/Q to...


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